HL Deb 19 June 1961 vol 232 cc412-6

3.47 p.m.

Order of the Day for the House to be put into Committee read.


My Lords, I beg to move that the House do now resolve itself into Committee on the Bill.

Moved, that the House do now resolve itself into Committee.—(Viscount Hailsham.)


My Lords, I thought we were going to have another statement?


There is another statement coming, but I have not yet the indication that we are in a position to make it. Perhaps we may proceed and break into the debate at a suitable moment. As your Lordships know, it is not entirely in my control as to when statements are made.

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clause 1 agreed to.

VISCOUNT COLVILLE OF CULROSS moved, after Clause 1 to insert the following new clause:

Assessments between valuation lists

".—(1) Where pursuant to any proposal for the alteration of a valuation list it is necessary to value or revalue a hereditament, the gross value of such hereditament in the case of a hereditament to which s. 22(1)(a) of the Rating and Valuation Act, 1925, applies or the net annual value of such hereditament in the case of a hereditament to which s. 22(1)(b) of the Rating and Valuation Act, 1925, applies, shall be taken to be the gross value or the net annual value, as the case may be, which such hereditament might reasonably have been expected to possess at the date when the valuation list came into force, on the assumption in the case of a hereditament which has come into existence since the valuation list came into force that such hereditament was subsisting at the date the valuation list came into force:

Provided that for the purpose of estimating the gross value or the net annual value which any hereditament might have been expected to possess as aforesaid account shall be taken of any material change of circumstances occurring after the date on which the valuation list came into force.

(2) In this section 'material change of circumstances' means in relation to any hereditament a change of circumstances affecting its value and, without prejudice to the foregoing generality, includes any alteration in such hereditament and any relevant decision of a court or tribunal in proceedings arising from a proposal to alter a valuation list, but does not include a change in the rent of the said or of any other hereditament or any change in the general level of valuations or in the values of hereditaments in general."

The noble Viscount said: I do not think that I can better start in commending to your Lordships this Amendment, or at any rate the principle behind it, than by quoting what Mr. Evans, who is tile President of the Rating Surveyors' Association, said in a letter to The Times this morning. He said: It elves effect to the views so often expressed by the Minister"— that is, my right honourable friend the Minister for Housing and Local Government— that uniformity and fairness of assessment is of paramount importance. I explained to your Lordships on Second Reading the problem which I am attempting to tackle with this Amendment, but I think perhaps I had better briefly do so again.

The value at which any building or, as it is called, hereditament, is assessed, is taken from what is calculated to be the rent which would be paid for a tenancy from year to year for that hereditament. That therefore means that the market value of the hereditament comes into play, and at the moment there is a rising market value for all property. There are, in theory, valuation lists brought into effect every five years, giving the rating value of each property in the country. In fact, it happens less often than that, and that makes things worse. To take, for example, the 1956 Valuation List, the valuation for that of all the properties included in it was done in 1954–55, and it was done at that time on the basis of prices then current. It may then happen that somebody wishes to challenge the sum at which his hereditament is entered in the list. He would do so in 1956 or 1957.

Again, between the date when the valuation list came into force in 1956 and the next one, he may do something which will alter the value of his hereditament in the eyes of the Inland Revenue or he may build an entirely new hereditament which may come into rating between valuation lists. There was a case in 1932 in which the Court of Appeal decided that where it became necessary to examine the value of any hereditaments which go into the lists, it should be the current value on the date on which this particular problem arose that should govern the matter. Therefore, in the three instances which I have given—the man who wishes to challenge his valuation in the list, or who changes his rating hereditament in between the lists, or who builds a new hereditament—the value for that hereditament will in each case be based, in strict law, on the price current at that time. All the other people, however, who have done nothing whatever to their properties between the lists will still, in the cases I have adumbrated, be assessed on 1954–55 values; and this is bound to lead to injustice.

It is widely said that it does not in fact do so because the Inland Revenue who are now in charge of valuation and rating do not take account of current prices but go on the principle known as "tone of the list"; that is to say, that when any of these circumstances arise, instead of using current values they continue to use 1954–55 prices so as to give fairness. I do not think that that is really a reason why this law should not be changed at this juncture. Surely no one can say that because the Inland Revenue ignores it and the Minister has so many times told us it should be changed, is a reason for not changing it. That is absurd.

Another reason has been given for not changing it: that is that it is being said that now there is to be a regular quinquennial review the problem will diminish, and that I admit. It has also been said that prices are more stable, but that I do not admit; and the danger that I foresee is that despite the quinquennial review, which I hope will be regular, there will be cases where a rating authority, who, after all, are the people who actually reap the benefits of the rates which are collected, may take advantage of the strict law and may, in between valuation lists, carry out small or partial revaluations in their areas which will mean an unfair distribution of the burden of rates. This also would be avoided if my Amendment were to be accepted.

On Second Reading my noble and learned friend the Leader of the House gave two other reasons why this was a difficult problem at the moment. He said it was a problem of statutory definition and it also ran into the difficulty which arises from the hereditaments which are not rated on the sort of bases which I have described but which are rated by reference to their accounts, or, as they are sometimes known, profits-basis hereditaments. I think these two problems to some degree hang together, but, first of all, I cannot believe and I do not think your Lordships will believe that this problem can be or ought to be held up until all the profits-basis hereditaments have, as has been suggested, been dealt with by some sort of formula such as can be found in Clause 3 of this Bill. In the first place, these hereditaments are few and far between, and are such things as caravan sites, some hotels, zoos, piers and I believe in Scotland kelpie beds and such rather obscure and by no means common hereditaments. It is surely most unjust that these very widespread and much needed amendments should have to wait until some formula has been discovered for all these hereditaments. I do not believe a formula will ever be discovered, because, in many cases it is entirely a matter of option whether these hereditaments should rate by reference to their accounts or not. Therefore no formula will ever be suitable for them.

Further, if that answer is intended to relate to profits-basis hereditaments which come into existence between the lists—that is to say, the new ones which are built—this must be a negligible amount and cannot be put forward as an excuse. I am informed by eminent surveyors that they would find no difficulty in dealing with that particular problem. What I think must be done, and what I have attempted to do in my Amendment, is to separate the definition of the profits-basis hereditaments from the other sort, in order that that other sort—the huge majority—should be allowed to get this fairness and equity now. If this could be done, I cannot believe it is beyond the ingenuity of someone to invent a formula or arrangement for the profits-basis hereditaments, based perhaps on some sort of four or five year average for the accounts. Anyway, I do not believe it to be the serious problem it is said to be.

Of course, the definition to which my noble and learned friend referred is probably not easy, and I do not suppose I have got it right, but, none the less, I have had an attempt at it and my attempt is based on the 1956 Scottish Act, which, so far as I know, dealt perfectly satisfactorily with the situation North of the Border between 1956 and 1961; and the wording that was there put into legislative form, after all, received your Lordships' approval for Scotland.

All I have said refers to a rising market. I think in principle it must equally apply to a falling market, and I would not make any differentiation between them. Further I cannot believe that the application of this Amendment to a falling market can do any great harm. Let your Lordships imagine the application of the present law to a falling market. Every ratepayer in the country would flock to the valuation courts to take advantage of the 1932 case and to have his assessment reduced; and surely this would produce administrative chaos. Therefore, whether for a rising or a falling market, I think that the principle at any rate behind this Amendment would produce a most desirable effect and one which I believe is in harmony with Her Majesty's Government's desire. I beg to move.

Amendment moved— After Clause 1, insert the said new clause.—(Viscount Colville of Culross.)


My noble friend Lord Lansdowne is now in a position to make his statement, and I therefore beg to move the House be now resumed.

Moved, That the House do now resume.—(Lord Newton.)

On Question, Motion agreed to, and House resumed accordingly.